Anyone who's old enough to remember Jimmy Carter in office remembers the term stagflation. It means a stagnant economy coupled with horrendous inflation. We haven't witnessed it in some three decades, and those of us who lived through it never wanted to deal with it again. But here it comes, according to that most venerated of financial institutions, the Fed:
In economic projections released by the central bank, the Fed's Open Market Committee said it expected that the economy would contract by 0.5 percent to 1.3 percent this year, that unemployment would rise to 8.5 to 8.8 percent and that inflation would remain under greater pressure. Bleak economic data reflecting a sharpening slide in housing, trade, industrial production, spending and employment rates "more than offset" any potential impact from an economic stimulus plan, the Fed said, forcing it to cut its economic outlook.
Who's to blame? George W. Bush, first of all. We reported on a C-SPAN poll that ranks George W. one of the 10 worst presidents in U.S. history.
Don't know what it was like living during the tenure of any of the rest of them, but Nixon was much, much better in my book, despite his fatal Watergate flaw. He didn't wreck the economy. George W. did, almost purposefully, it seemed. He came into office with a record surplus and overspent into a record deficit. He is single-handedly responsible for today's economic mess.
I believe Barack Obama has the makings of a great president, but whether he succeeds all depends on whether the economy improves. And for that verdict, it's a wait-and-see game. In the meantime, I think we'll suffer through some, if not a lot of, stagflation.
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By Bonnie Erbe